Advisers have backed Government plans to “rationalise” pensions guidance after the Treasury raised concerns about overlapping services.
In a financial guidance paper published alongside the Financial Advice Market Review consultation, the Treasury suggested cuts could be made to the services offered by the Money Advice Service and Pension Wise to reduce duplication.
Currently, pension guidance is provided through Citizens Advice and The Pensions Advisory Service in the form of Pension Wise, while the MAS also publishes retirement savings information on its website.
In the paper, published this week, the Treasury said: “There is crossover in the provision of public financial guidance on pensions for decisions taken at retirement between the organisations in scope of the consultation, particularly on web content.
“In addition, with three streams of levy funding being directed towards activity which has a pensions guidance element, there may be an opportunity to rationalise the delivery of statutory pensions guidance.”
Highclere Financial Services partner Alan Lakey says: “There are too many bodies overlapping and trying to perform the same functions. It’s a bit pointless and if you stop any person in the street, I still think they won’t have heard of Pension Wise and would probably go to either the Citizens Advice or an adviser for advice.
“Many of these organisations, and MAS in particular, have been a failure in making the public more aware and achieving their goals.”
Pilot Financial Planning director Ian Thomas says: “For whatever reason, the system is confusing and people aren’t taking advantage of it, so a real root and branch review of how and where this money is being spent is a good thing.
“However, it should not just stop as asking whether we should smash all the MAS and Citizens Advice together, it also needs to look fully at what role IFAs can provide.”
One suggestion offered by the Treasury would be a voucher sch-eme “whereby a consumer could be provided with one or multiple vouchers for financial guidance sessions which could be redeemed with a range of accredited partners”.
Treasury sources suggest partners could include private sector firms, Government organisations and charities, but add that no decisions have been made as yet.
Policymakers are still weighing whether any voucher system should be limited to guidance, or go as far as financial advice.
Personal Finance Society chief executive Keith Richards says: “A voucher system would put the consumer in a better position because if a client needed ongoing support, then they would be in the right place. The Treasury is looking to that sort of model as a possible solution.”
The Treasury paper also notes the recent decision to house Pension Wise in the Department for Work and Pensions may only be temporary.
Richards says: “There is a chance that, depending on the outcome of the FAMR process, the industry could take over the provision of guidance and that would tie in with a voucher scheme idea.
“It is encouraging that the Government is prepared to look at these things.”